Gov. Paul LePage was a vocal opponent of two initiatives that Maine voters approved on Nov. 8. He continues to argue that Question 2, which would generate funding for public schools through a surtax on high-income households, and Question 4, which raises the minimum wage, would both hurt the economy.
He’s asking the next Legislature to make changes in both laws, but some leaders in Augusta say they’re reluctant to second guess the will of the voters.
Mainers approved the minimum wage bill by a solid margin, but LePage believes it will hurt the economy by forcing small businesses to cut jobs. He is particularly worried that the cost will be passed on to consumers, including seniors, in the form of higher prices.
“The minimum wage bill is going to really put about 325,000 seniors in severe poverty. I’m going to do everything in my power to try and mitigate that and help them,” he says.
In a letter to lawmakers, LePage proposes that the increase in the minimum wage be phased in over a longer time, and that automatic future increases be removed. He also asks that lawmakers restore a lower minimum wage for workers who receive tips.
“It was pretty widely discussed here in the building with folks from both sides of the aisles that it was doing away with the tip credit.” says Senate President Mike Thibodeau.
Thibodeau and other Republican leaders say the initiatives can be modified if necessary. They point to changes that will have to be made due to flaws in the drafting of the recreational marijuana measure, for example.
But Democrats are wary of doing anything significant to change the minimum wage proposal.
“Of all the questions that passed, that’s the one that passed with the largest margin,” says Lewiston Democrat Jared Golden. “About 55 percent is a pretty strong vote.”
Golden, the assistant House majority leader, says that while he is willing to consider making changes, the will of the voters needs to be respected.
“I think people spoke clearly,” he says. “I am not someone that ever walks into an issue saying, ‘You know, I am not going to listen.’“
Incoming state Sen. Troy Jackson, a Democrat from Allagash, will serve as minority leader. He says Democrats will be reluctant to make changes even to the controversial tip credit portion of the minimum wage law.
“Many people in this state may feel that is not something that should be in there. But that is what was voted on by the people of the state of Maine,” he says. “Win or lose, you have to honor the people’s vote.”
In his letter to lawmakers, LePage also mentions other initiatives aimed at easing the burden he says will be caused by the passage of the minimum wage increase. He wants to remove the income tax from pensions, reduce the cost of medications for seniors and make it more difficult for lenders to foreclose on elderly homeowners.
As for Question 2, which creates a fund for public schools through a surcharge on wealthier households, LePage says he would not propose changing the surtax itself but instead present a major tax reform package that will reduce the regular top income tax rate on which the surcharge is assessed, which now stands at 7.15 percent.
“The tax increase, the surcharge, I have no choice — I’m going to have to put a surcharge on. But this 7.15 percent, that I have something to say about, there is no restrictions on that. All this referendum said was we have to add a 3 percent surcharge,” he says.
The governor says his target is a top rate of 5.75 percent, which would come with a price tag of tens of millions of dollars.
Incoming House Speaker Sara Gideon, a Democrat from Freeport, says Democrats will take a good look at the governor’s budget proposal.
“I, and Democrats in general, remain committed to the idea of funding education, which is what Question 2 was about and I think he is trying to get at. No. 1, we also believe in a progressive tax structure,” she says.
On the Republican side, Thibodeau says his caucus will not support any tax reform effort that simply shifts the burden around.
“Shifting taxes creates winners and losers every time,” he says. “If we can find a way to reduce the tax burden, that’s great. But you know, if we are just shifting taxes for the sake of redistributing, I don’t see the panacea in that.”
The status of Question 2, meanwhile, is still up in the air. It passed by a very narrow margin, and is now undergoing a recount.
